Many commentators are now suggesting that the Vienna Convention on the International Sale of Goods
[1] (hereafter "Convention"), 10 years after it has come into force, might be failing to accomplish its task of
bringing uniformity and predictability to international sales law. Some commentators argue that the Convention
not only fails at its goal of bringing uniformity, but actually harms this goal.[2] While these commentators point
out difficulties with the Convention's ability to bring predictability to international sales law, these difficulties
were known when the Convention was created and, furthermore, are not fatal to the usefulness of the
Convention.

In general, the Convention governs contracts for the sale of goods between parties from different countries
that have signed the Convention.[3] It supplants the domestic law of nations as to certain international sales
in two areas: 1) the formation of sales contracts and 2) the rights and obligations of the parties to sales
contracts.[4]

Drafted by the United Nations Commission on International Trade Law (UNCITRAL) the Convention
was adopted by a diplomatic conference in Vienna in 1980. International groups had been trying to create a
uniform law for the international sale of goods since 1930.[5] Two previous attempts to unify international sales
law were heavily influenced by the Civil Law traditions of Western Europe, to the neglect of the common law
and other world legal traditions, and consequently failed to obtain worldwide approval. Therefore,
UNCITRAL set out to draft a set of laws that would consider the views of a wider array of countries. The
result was the Convention, which subsequently came into force for eleven countries, including the United
States, on January 1, 1988. As of August 20, 1999, there were 57 signataries to the Convention, albeit some
with reservations.[6]

To examine the Convention, a good starting point is jurisdiction. Whenever there is a sale of goods
between two parties who have their principal place of business in [page 473] different contracting states, the
Convention applies unless there is an exception.[7] The Convention covers commercial purchases of goods,
but not "goods bought for personal, family or household use."[8] Article 4 limits the Convention's scope to the
formation of the contract and the rights and obligations of the buyers and sellers. The Convention does not
govern some controversial areas of the law that the UNCITRAL committee failed to agree upon, such as
validity of the contract and products liability.[9] Finally, the Convention strongly recognizes the principle of
freedom of contract and allows parties to contract out of any provision.[10] In fact, it allows the parties to opt
out of the Convention altogether.[11] In the United States, the Convention is a self- executing treaty; this
means that any time its terms are met, the court must apply it.[12]

Creating uniform private international law is an attractive idea. When transacting business with someone
from a foreign country, one need not be aware of all the vagaries of the foreign system, but only the one system
of law that the whole world transacts business upon. This decreases the legal risk inherent in transacting
business on an international scale and consequently creates more profitability in international trade.

There are, however, many obstacles to achieving this utopian notion of a singular law.[13] Getting many
nations to agree to a system of law that is foreign to [page 474] their own is difficult in the first place. In tackling
this barrier one must also overcome language and cultural differences. And even if it is possible to find
agreement to a uniform set of laws, one still has to determine how to maintain this uniformity in the
interpretation of the law. This paper will focus on the latter difficulty.

There are different ways one can try to insure uniformity. One might use a supreme court, or some similar
body, to handdown the "true" interpretation of a law. One might use a principle similar to the common law
concept of stare decisis making case law binding upon future courts. The Convention, however, does not
provide for any superior body to provide the "true" interpretation of its rules. There is also little interest in
creating a body to review decisions under the Convention because merchants generally prefer quick, efficient
settlements to their disputes; such a body would create delay.[14]

The Convention instead allows domestic courts and arbitrators to be the sole interpreters. It directs these
interpreters, in Convention Article 7(1), to keep in mind the "international character [of the Convention], the
need to promote uniformity . . . and the observance of good faith in international trade." This is the primary
means by which the Convention seeks to ensure uniformity of interpretation. Domestic courts and arbitrators
must rise to the occasion, follow the directive of Article 7(1), and interpret the Convention in a uniform manner.
This means interpreting the Convention autonomously from domestic conceptions of sales law.

Early commentators were optimistic and excited about the Convention. They were excited that so many
countries were able to agree on a uniform sales law and optimistic that, with this worldwide agreement,
international sales law would become much more unified.[15] These commentators were aware of the
difficulties that lay ahead in achieving the desired uniformity, in particular the difficulty of getting national judges
to interpret the Convention autonomously and not through the lense of domestic law. However, the
commentators believed that, with proper care, this could be accomplished.

After ten years of case law, some commentators have grown pessimistic in their appraisal.[16] Given the
scarcity of case law in some jurisdictions,[17] the use in some jurisdictions of domestic law to interpret the
Convention,[18] and a tendency in some [page 475] jurisdictions to ignore the Convention where it is applicable,
[19] some commentators now believe that obstacles to uniformity are greater than once thought, suggesting
that the Convention might not be a success. As noted previously, there are some who claim the Convention
actually harms the goal it attempts to promote- decreasing legal risk by imposing a body of law that is less
specific and less defined than current domestic systems of law.[20] Indeed, because the Convention is new
and limited as to case law or commentary, the Convention arguably brings more confusion to international sales
law. In other words, the international community, by enacting the Convention, created more legal risk and
more uncertainty by creating a new set of laws.

While there is perhaps some credence to the argument that the Convention creates more legal risk because
it has a less defined area of case law, this objection should fade with time, as a body of case law builds around
the Convention. Indeed, there are now over 400 decisions world-wide discussing the Convention. Given that
case law and commentary will continue to build, the Convention may one day have as deep an analysis as any
country's code of laws.

As for the commentators who are now concerned that countries will not be able to divorce their domestic
ideas of sales law from their analysis of the Convention, there needs to be a reappraisal of the uniformity that
we expect to achieve through the Convention.[21] The Convention does not cover all areas of sales law and,
in fact, leaves some extremely important areas of sales law, such as the validity of the contract and products
liability to individual countries. It also allows a court to turn to private international law if the court is unable
to find a provision or a general principle that governs a particular situation. Proceeding in this way, there is no
way for the Convention to achieve perfect uniformity. Even in those areas that the Convention clearly governs,
there will be differences of interpretation, just as courts within domestic systems have differences of
interpretation of their "uniform law." This is not detrimental to the goal of the Convention.

The Convention provides a modern, uniform text of rules that govern international sales contracts and, in
particular, allows the party's contracts and customs to rule their affairs. It provides the international legal and
business community with a good text and structure that they can debate on common ground and thereby arrive
at a greater level of uniformity in international sales law. However, because of the diverse group of countries
that are interpreting its provisions, the Convention will not and can not bring to international sales a perfect or
even a high level of uniformity. This is not to say that it will not provide a useful level of uniformity. What is
needed now is patience and work towards making signatory countries' courts and lawyers aware of the
Convention and its unique problems of interpretation. [page 476]

Assuming that the Convention will not effect perfect uniformity in international sales law, how should one
go about interpreting the Convention in order to obtain a useful level of uniformity? The interpretation should
start with the text. But when looking to the text, the court should consider the international character of the
Convention as Article 7 directs the court to do. When interpreting the Convention, courts must not only
consider the difference between Common and Civil law, but they must also consider the difference between
the East and the West, third-world countries and industrialized nations, and socialist and free-market countries.[22] The temptation to turn to domestic sales law, being the law with which one is familiar, to interpret the
Convention should be avoided.

The European Court of Justice expressed a concept of interpretation of European Community law that
interpreters of the Convention could benefit from. In S.r.l. Cilfit v. Ministry of Health,[23] the court stated
"[E]very provision of Community law must be placed in its context and interpreted in the light of the provisions
of Community law as a whole, regard being had to the objectives thereof and to its state of evolution at the
date on which the provision in question is to be applied."[24] This is an organic concept of Community law.
There is no one true static interpretation of Community law. Instead, interpretations are made in relation to the
written laws, history, and current status of the European Community and its objectives.

One might argue that the Convention is different from the European Community because the Convention
is an unchanging code while the European Community is changing as new laws and treaties are written.
Therefore, it is natural to have an evolving European Community while the true Convention requirements
should remain static. A fair analysis of the Convention, however, will show that the Convention has the
intention of growing and evolving with international sales law. It places primary importance on the contract as
it is written, but perhaps more importantly on the customs and usages that the parties have adopted within their
industry. Only after observing these matters do the Convention's provisions apply.

Customs and usages are not static matters. The international trade community's customs and usages are
always evolving. Therefore, the terrain to which the Convention applies will inevitably change and the
interpretations of the Convention will have to change accordingly. That which is reasonable or a fundamental
breach at one time may not be so at a later date. Thus, it is natural to conceive of the Convention, based on
its own terms, as an evolving set of laws, instead of one static code that has one uniform interpretation that may
be applied. Thinking about the [page 477] Convention in this way allows one to escape from the rigid concept
of uniformity that many commentators seem to urge or think is the goal of the Convention.

Although there is no one static interpretation of the Convention, it does provide a clear structure for courts
to use when interpreting its provisions. The Convention is intended to fully govern the law of the formation of
a contract and the rights and obligations of the parties to a contract.[25] When it has not answered a question
within this realm directly, then one should decide the case in conformity with general principles of the
Convention. Article 7(1)'s requirements of regard to international character, uniformity of application and
observance of good faith in international trade should guide the search for general principles. Only when the
Convention yields no governing principle should the judge consult outside sources.[26] Article 7(2) refers not
to "the gaps intra legem, i.e., the matters that are excluded from the scope of application of the Convention,
such as (validity of the contract), but the gaps praeter legem, i.e., issues to which the Convention applies but
which it does not expressly resolve."[27]

There is still some disagreement over how to fill praeter legem gaps. Advocates from common-law
countries have argued that gaps should be filled by domestic legislation even when a solution can be found
within the principles of the Convention.[28] This is generally the method that a common-law judge would apply
to a statute that does not expressly prescribe the law; he would turn to the common law for the answer and
not some principle garnered from the statute. The Convention, however, clearly adopts in Article 7(2) more
of a Civil-Law approach by directing the interpreter of the Convention to decide the case in conformity with
general principles from the Convention. It is like a code that preempts a field of law. It requires the judge to
look to the general principles first, and only "in the absence of such principles, [then] in conformity with the law
applicable by virtue of the rules of private international law." This compromise was intended to appease the
common-law countries. Looking to private international law would mean that where there was an absence of
general principles to be found in the Convention, the court should look to the country's conflict-of-law rules
and apply the proper domestic legislation. This, however, should be the rare case. A judge normally should
be able to find a general principle to fill the gap.

What sources can help to interpret the Convention when a gap needs to be filled? First, as already
mentioned, one should proceed by analogy using the general principles of the Convention. While there are
sometimes conflicts, there are some general principles that can be derived such as freedom of contract, the
duty to act reasonably, and the duty to perform in good faith.[29] One can also interpret the Convention by
consulting doctrine, prior case law,[30] and travaux pr paratoires, i.e. [page 478] legislative history of the
Convention.[31] Finally, one should always keep in mind that the contract is governed by any usage "which
the parties knew or ought to have known and which in international trade is widely known to and regularly
observed by parties to contracts of the type involved in the particular trade concerned."[32]

Many authors have argued that using prior case law to interpret the Convention is a useful means of
ensuring uniform interpretations. However, there is question as to whether this case law should be binding or
simply persuasive. The argument for making it binding is that it would be a means of making the interpretation
of the Convention uniform. Some authors have pointed out the danger of using case law as precedent.[33]
Their concern is that one should not be locked into a foolish interpretation of the Convention for the sake of
uniformity. They argue, further, that the goal of the Convention is not, as stated in its own terms, uniformity
alone, but also concern for interpreting a contract with its international character in mind and with the purpose
of promoting good faith.[34]

It cannot be argued that the Convention itself requires the courts to apply the principle of stare decisis and
make prior case law binding. The only Article that might be interpreted to require stare decisis would be
Article 7(1)'s directive to have "regard" to uniformity when interpreting the Convention. However the word
chosen is "regard" which does not suggest a requirement to achieve uniformity at all costs. Therefore, a
reasonable reading of this Convention directive would be that it requires a principle similar to jurisprudence
constante, a principle from Civil- Law legal systems. This principle holds that case law is not a binding source
of law, but a persuasive source of law. This would mean that when interpreting the Convention, a court should
look to other court's interpretations of the Convention, including the interpretations of courts from other
countries. These interpretations, however, would not be binding, but only persuasive.

The use in the U.S. of case law to interpret the Uniform Commercial Code (UCC) can serve as a model
for courts using case law to interpret the Convention.[35] No state within the U.S. is bound by an
interpretation of the UCC from another state, but the interpretations of the UCC from other jurisdictions are
extremely persuasive. While this method does not achieve exact uniformity, the U.S. has achieved a level of
uniformity of sales law that is useful to companies transacting business in many states.

There have been calls for the addition of comments to the Convention as the U.S. has for its UCC, and
there has also been a call to have a body within UNCITRAL to issue opinions as to the correct interpretation
of the Articles of the Convention.[36] Although both ideas might be useful, it is rather unlikely that either will
occur. With fifty-seven countries party to the Convention, finding agreement as to this matter would be difficult.
The two ideas, however, are not necessary to [page 479] the goal of uniformity. As mentioned, doctrine and
legislative history are perfectly reasonable, instructive sources and both will provide guidance to the judge
looking for the proper interpretation. Many universities and institutions around the world, including Pace
University, have established databases that have much of this information online for ready access.[37]

Judges and lawyers should remember that the object of the Convention is to bring about an international
trade community, and interpret it accordingly.[38] When a domestic court is interpreting the Convention, it
should realize that it is contributing to this text on an international level. While it will continue to be difficult to
achieve uniformity, one can come closer to reaching this international community through an international
discussion between courts and scholars, always recognizing the other systems at hand.

The current state of jurisprudence under the Convention suggests that it is going to take some time before
signatory countries to the Convention understand how to interpret the Convention properly. Thus far,
companies, attorneys and judges from the U.S. have been slow to adopt the Convention into usage and have
not always interpreted the Convention properly.[39] There are some cases, however, that suggest that U.S.
courts can and will move in the direction of interpreting the Convention in conformity with its international
character.[40] There is further evidence that healthy debates are occurring on an international level regarding
the Convention.[41] This section will discuss these issues.

Most cases involving the Convention have occurred in European courts, especially in Germany.[42] To
date, only seventeen cases in the U.S. discuss the Convention, several mentioning it only in passing.[43] This
is strange considering the U.S. presence in international transactions. John Honnold, a Convention scholar and
a member of the committee that drafted the Convention, has suggested a few reasons for this scarcity in the
U.S.:

"(1) Our lawyers are not litigious; [laughter] (2) Our court dockets are so overcrowded that protracted
delays discourage suit and encourage [page 480] settlement; and (3) The great majority of cases are in central
Europe-countries that had a decade or so of satisfactory experience with the predecessor to the CISG, the
1964 Hague Convention that provided uniform rules for international sales. [Discussion from the floor by the
European scholars supported the third alternative.]"[44]

Adding to the third reason suggested by Honnold is that many American lawyers appear hesitant to
recommend that a client make the Convention applicable to their contract because of the sparse case law on
the matter and the consequent uncertainty.[45] They would prefer to use a body of law with which they are
familiar.

This sparse case law makes it hard to detect any real trends in U.S. Convention jurisprudence. From what
case law exists, Beijing Metals & Minerals v. American Business Center, Inc.[46] illustrates the fears of the
commentators that courts will turn to domestic law to interpret the Convention rather than providing an
autonomous interpretation. The court in Beijing Metals found that the Texas parol evidence rule applied to a
dispute whether the Convention was involved or not.[47]

A Chinese manufacturer (Beijing) had entered into a contract with an American company (ABC) to
supply weight lifting equipment. Beijing sued ABC for failure to pay on the contract. ABC argued that oral
agreements between the parties had been made that were a defense to their failure to pay on the contract. The
court applied the Texas parol evidence rule and excluded the oral agreements as a possible defense.[48] In
a footnote, however, it said the Convention might apply to this dispute, but "we need not resolve this choice
of law issue, because our discussion is limited to application of the parol evidence rule [which applies
regardless]."[49] Thus, without any analysis of the Convention articles, the court asserted that the Convention
included Texas' parol evidence rule.[50]

While it has been argued that the parol evidence rule is consistent with the Convention,[51] most
authorities agree that the American substantive rule of parol [page 481] evidence is not part of the Convention.
[52] However, regardless of whether the parol evidence rule could be included as a general principle of the
Convention, the wild assertion that it is part of the Convention, without any analysis, is just the type of
interpretation that Article 7 directs courts away from. Fortunately, other U.S. courts have found that the parol
evidence rule is inconsistent with the Convention and have not followed the precedent of Beijing Metals.[53]

U.S. courts have also been guilty of making the general, misleading assertion that where language from the
Convention is analogous to a domestic provision, the Convention can be interpreted in line with the domestic
provision. One court has said, "caselaw interpreting analogous provisions of Article 2 of the Uniform
Commercial Code ("UCC"), may also inform a court where the language of the relevant CISG provisions
tracks that of the UCC."[54] While this is not an unqualified endorsement of the proposition that the UCC and
the Convention mean the same thing, it is a misleading statement.[55] As discussed previously, interpretation
of the Convention should be a wholly autonomous matter. Turning to domestic law for interpretive authority
has the strong possibility of tainting the interpretation of the Convention.

For instance, the UCC and the Convention on some points reach quite different results in sales law
problems, notably the "battle of the forms" problem. In contract formation, the Convention adopted the "mirror
image" rule.[56] This means that someone must accept an offer in the exact material terms in which the offer
was made. If there are any material differences, the "acceptance" is a counter-offer instead of an actual
acceptance. There is no doubt that the term "material" will lead to much litigation, but the general tenor of the
Article is that acceptance must be substantially similar to the offer. With the UCC, however, one can quite
easily accept an offer with different terms than in the offer if the offeror does not timely object.[57] If a court
interpreted the Convention in light of the UCC provision on formation of contract, one would have a more
liberal approach to contract formation than the Convention Articles indicate should be applied.

While U.S. courts have not always approached the Convention with the international perspective that
Article 7 directs the courts to adopt, the U.S. does have one of the few cases internationally that actually looks
to case law from another country. This key U.S. arbitration case, the first in the U.S. to cite Convention case
law from a foreign tribunal, occurred in Louisiana.[58] In 1993, [page 482] Medical Marketing International,
(MMI), a Louisiana corporation, entered into an agreement with Internazionale Medico Scientifica, (IMS),
an Italian corporation that manufactured radiology devices in Italy. IMS granted MMI the exclusive rights to
market its mammography unit in the United States. In 1996, after MMI had purchased some units, the Food
and Drug Administration (FDA) determined that IMS was not in compliance with the FDA's Good
Manufacturing Practices for Medical Device Regulations.

MMI declared IMS in breach and cancelled the contract. The parties disagreed as to who was responsible
for ensuring that the units met the standards of the FDA. When they were unable to work out their differences,
MMI submitted the case to an arbitration panel pursuant to the contract. The arbitrators found that the
Convention applied to the case. Though the Convention was not clear on the point of responsibility for meeting
the standards, the arbitrators cited a German case that held that the buyer was generally responsible. However,
the arbitrators found that under an exception to the rule cited by the German court, IMS had breached the
contract because it either knew or should have been aware of the FDA regulations.

On appeal to the U.S. District Court, IMS argued that the arbitration panel improperly applied the
Convention by not adhering to the German Federal Supreme Court holding. The District Court held, however,
that the arbitration panel properly followed the German precedent, but that this case fit within the exception
to the rule. The question presented to the arbitration panel was which party should be responsible for meeting
specific regulations when the contract did not state who should bear this burden. In a different sense, the
question was whether the goods provided by IMS conformed to the contract. The arbitrators believed Article
35 of the Convention, which determined whether the good was of the quality specified of the contract, was
the applicable provision.[59]

The arbitrators, at the prompting of IMS's counsel, looked to a German Federal Supreme Court
interpretation of Article 35.[60] In this German case, a German buyer purchased mussels from a Swiss seller.
Over a month after delivery of the mussels, the buyer notified the seller that the mussels were not of the proper
quality. When the buyer refused to pay for the mussels, the seller sued for the price of the mussels. [page 483]
The court found that under Article 39(1) [61] the buyer had failed to give notice of non-conformity within a
"reasonable time." Although Article 39(1) had settled the case, the court also interpreted Article 35. The court
held that a seller is normally not responsible for the regulations in the buyer's country, but special circumstances
may provide an exception to this rule, particularly if the seller knew or should have known of the regulations
of the buyer's country.[62]

Using the German interpretation of Article 35, the arbitrators in Medical Marketing International v. Internazionale Medico Scientifica concluded that IMS was aware of the FDA regulations from prior sales of
equipment in the U.S. and was, therefore, responsible for meeting the regulations. They noted that IMS had
made indications to MMI in 1992 that its equipment met all the requirements of the FDA, allowing MMI to
reasonably rely on this statement. The arbitrators stated, "we conclude that the combination of the foregoing
factors amounts to 'special circumstances' which constitute an exception to the general rule under the CISG
that a seller is not responsible for compliance with governmental safety regulations enforced at the buyer's
place of business."

This case raises the question of the importance, previously discussed, of case law in the interpretation of
the Convention. Should courts apply stare decisis and consider prior case law binding? Or, should case law
serve only as persuasive authority? The Convention does not indicate that case law is the law or becomes a
part of the Convention. It simply directs courts to regard the need to promote uniformity and recognize the fact
that the Convention is a body of law to be applied internationally. This does not lead to the conclusion that
stare decisis should apply to interpretations of the Convention. Instead, the language of Article 7 suggesting
that a court have "regard" to uniformity indicates that case law only provides persuasive value similar to that
embodied in the concept of jurisprudence constante of civil law systems.

The fact that the arbitrators looked to a foreign tribunal's decision in an effort to interpret a Convention
article is justified. This is the first time that this has occurred in the U.S. and one of the few times that it has
occurred in Convention jurisprudence. Proceeding in this manner is part of Article 7's directive. However, if
the arbitrator's holding stands for the proposition that the German interpretation of Article 35 was binding, then
this is going a bit too far. A better analysis would have consisted of looking at the text of Article 35, and
considering it in light of the general principles of the Convention and the German [page 484] court's interpretation
of the Article. The arbitrators could then determine that the German court's interpretation was a wise one and
follow its lead.

Clearly enunciating and following a correct procedure in interpreting the Convention is particularly
important with international sales law that is intended to be uniform. Future courts and arbitrators from around
the world will be reviewing the case law and will be inevitably influenced by how the Convention has been
interpreted. With the language and cultural barrier involved, being unclear in analysis can only lead to a
breakdown in our ability to communicate our understanding of the Convention with other legal systems. If this
breaks down, we lose the value of a uniform sales law because each country interprets it in its own way.

A great example, in Convention case law, of the discussion that can go on internationally as to the
provisions of the Convention has occurred in a debate over the definition of "interest" in Convention Article
78. It requires delinquent payors to pay interest on the money they failed to pay.[63] The Article, however,
does not define what interest is owed. Many courts have found that this issue is settled neither by the express
articles of the Convention, nor by the general principles of the Convention. Therefore, the court must turn to
the rules of private international law.[64] The court would consult its conflict-of-law rules and apply the interest
provisions of the country to which those rules pointed.

An Austrian arbitration case however made an interesting contrary finding.[65] The arbitrator, a
Convention scholar named Professor Bonell, found that a buyer was allowed to recover interest and held that
the interest to be paid was a matter to be defined by the Convention and not a gap to be filled by domestic
law. He reasoned that because domestic law could occasionally provide that no interest was due-a conclusion
contrary to the Convention-that the rule must be within the Convention instead. The general principle he argued
was that someone should be fully compensated for his loss. Because the damaged party would likely have to
borrow from a local bank, the interest rate of the damaged party's country should be used as the proper rate
of interest.

While these may be conflicting decisions, and therefore not "uniform," they show a healthy debate as to
what the Convention requires. Just as the U.S. has within its law a majority and minority view on many topics
of law, including the UCC, the Convention will also have different views as to what the Convention requires.
The lack of certainty in this provision does not show that the Convention [page 485] is a useless document that
cannot lead to uniformity but instead is a symptom of the impossibility of providing absolute certainty with
words. What the debate does show is that the Convention provides a uniform document that did not exist
before, that can allow courts and scholars to discuss international law with a common vocabulary. In this way,
the international community can come closer to the vision of a uniform law of sales.

The Convention has not brought perfect uniformity to the international law of sales. This is an impossible
goal. Its goal of bringing more predictability to international sales law, however, is a useful and possible goal.
As more case law and commentary on the Convention develops, courts will apply the Convention with more
regularity, and practitioners will be more likely to recommend the use of the Convention. This will bring more
predictability to international sales law. Getting courts and practitioners from 57 countries to use and properly
apply the Convention is not something that can happen overnight or even within ten years. What is essential
is that scholars continue to write articles critiquing court decisions and making broad analysis of Convention
articles. By focusing first on the words of the Convention and the principles found therein, courts will go a long
way towards meeting the directive of achieving uniformity in the law. [page 486]